The International Monetary Fund (IMF) released its global economic forecast Thursday in the face of a growing credit crisis and predicted a recession in the US and the world in 2009, according to Sify.
In an update of its World Economic Outlook from October, the IMF said global growth would slow to 2.2 Per cent in 2009, down from the 3-Per cent forecast made last month. Growth of under 3 Per cent is considered a global recession.
The US, the world`s largest economy, will contract by 0.7 Per cent and the euro area by 0.5 Per cent in 2009. Advanced economies as a whole will contract 0.3 Per cent, compared to 1.4-Per cent growth this year, it said.
All figures represent a downward revision of more than 0.7 Per cent from the IMF`s October forecast.
Developing and emerging economies by contrast will continue to lead growth in the world, increasing 5.1 Per cent in 2009. But that is still down from a forecast of 6.1 Per cent made in October. Growth in the developing world was forecast at 6.6 Per cent this year.
A global financial crisis has severely impacted the availability of credit around the world, curbing spending in wealthy nations and restricting poorer nations` access to foreign investment.
"There has been a sharp worsening of credit conditions to emerging countries," said chief IMF economist Olivier Blanchard.
The IMF expects sharp slowdowns in Eastern Europe as well as Russia and its neighbours. China`s economy will continue to grow at 8.5 Per cent in 2009, down from 9.7 Per cent this year and 11.9 Per cent in 2007.
